To combat multi-decade high inflation, major developed and emerging market central banks around the world raised interest rates by nearly 1,200 basis points in July alone, Reuters reported.
Last month, central banks overseeing five of the 10 most heavily traded currencies delivered 325 basis points of rate hikes between them. This brings the total volume of rate hikes since the start of the year across G10 central banks to 1,100 basis points.
However, July's tally was less than the 350 basis points seven central banks delivered in June.
July was dotted with some eye-catching moves. Canada emerged as the chief hawk, stunning markets by delivering the first 100-basis-point rate increase among the world's advanced economies in the current cycle, lifting its key policy rate to 1.5%.
New Zealand delivered its sixth straight interest rate rise and signalled it remained comfortable with its planned aggressive tightening path to restrain runaway inflation.
And then, of course, the big one: The Fed delivered its second straight 75-basis-point rate hike, reinforcing its commitment to contain red-hot inflation running at 40-year highs.
There was no let-up for policymakers in emerging markets, where inflation had been on a tear for much longer than in developed economies.
Nine out of 18 central banks delivered 850 bps of rate hikes in July. In total, emerging market central banks have raised interest rates by 5,265 bps year-to-date—nearly double the 2,745 bps for the whole of 2021, calculations show.
Back in India, the RBI has raised interest rates by 90 basis points so far in 2022.
However, emerging markets have also seen cuts, with Russia reducing interest rates ratcheted up to 20% in the wake of its Feb. 24 invasion of Ukraine, which sparked sweeping sanctions.
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